Here’s why the Vodafone share price is rallying

By: Crispus Nyaga
Crispus Nyaga
Crispus is a Financial Analyst for Invezz covering the stock, cryptocurrency and forex markets. He’s an experienced analyst with… read more.
on Feb 2, 2022
  • The Vodafone share price jumped sharply on Wednesday.
  • The rebound happened after the latest earnings.
  • The company reiterated its forward guidance.

The Vodafone (LON: VOD) share price popped by more than 3% on Wednesday after the company reiterated its guidance for the year. The stock is trading at 132p, which is about 24% above the lowest level in 2021. It is hovering near its highest level in June.

Vodafone guidance

Vodafone is a leading telecommunication company with vast operations in Europe, Asia, and Africa. The company offers multiple services like voice, data, and business solutions. 

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In a statement on Wednesday, Vodafone said that it was on track to meet its full-year profit targets. It also boosted its target for the first quarter of the year. 

Vodafone made service revenue of 9.6 billion euros as the German revenue jumped by just 1.1%. It expects that this year will be better than in 2021 as business travel returns and roaming revenue jump. The CEO said;

“We remain focused on our operational priorities to strengthen commercial momentum in Germany, accelerate our transformation in Spain, and position Vodafone Business to maximise EU recovery funding opportunities.”

The Vodafone has also been under pressure this week after an activist investor bought a big stake. Cevian Capital Management is now one of the leading shareholders in the company. The fund said that Vodafone should rethink about its vast global holdings. 

Cevian, which is the biggest activist hedge fund in Europe, has also called for a board overhaul in a bid to boost the company’s performance. It hopes that the firm will be aggressive in driving consolidation with other operators in places like Spain and the UK.

Cevian has achieved success in this model several times before. For example, the company has had activist campaigns in companies like Ericsson, Aviva, and Pearson.

Analysts are optimistic about the Vodafone share price. The median analysts forecast is that the stock will jump to 167p, which is about 36 pence above the current level.

Vodafone share price forecast

vodafone share price

The daily chart shows that the VOD share price has been in a strong bullish trend in the past few months. Along the way, the stock has managed to move above the 61.8% Fibonacci retracement level. A closer look shows that the stock is about to form a golden cross, which happens when the 50-day and 200-day moving averages make a crossover.

Therefore, there is a likelihood that the Vodafone share price will keep rising as bulls target the next key resistance at 150p.

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